Record food prices a killer, says Zoellick

The cost of food on international markets has surged to near-record ­levels, exacerbating the humanitarian disaster in the Horn of Africa, where about 12 million people are in need of urgent assistance.

The World Bank has reported that global food prices last month were on average 33 per cent higher than a year earlier. Staples including maize, wheat and sugar, are up to 84 per cent more expensive than they were in mid-2010.

Soaring prices have enabled Australian farmers to cash in on some of the best harvests in years after last decade’s devastating drought.

World Bank president
Robert Zoellick
said expensive food was pushing some of the world’s most vulnerable people to the brink of starvation.

“Record food prices mean the poorest people in the developing world are living on the edge," he said.

Mr Zoellick was in Canberra yesterday for talks with senior government officials, including Treasurer Wayne Swan.

Australian Bureau of Statistics figures show prices for the nation’s rural exports jumped 4.3 per cent in the June quarter. They were almost 15 per cent higher than a year earlier, including a 4 per cent rise in the cost of cereals and a 1.5 per cent increase in meat export prices.

High prices for farm exports helped drive the nation’s terms of trade up 11.7 per cent last financial year to reach its highest point in 140 years. The Australian Bureau for Agricultural and Resource Economics and Sciences has forecast the value of farm exports will rise 7 per cent in 2011-12 to reach $34.1 billion.

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The government research group said the outlook reflected improved farm production and a favourable outlook for prices on international markets despite the strong dollar.

The bureau expects prices for wheat, rice, oilseeds and sheep meat to increase, offset by lower anti­cipated earnings for barley, sugar, beef and some dairy products.

The World Bank estimates that more than 12 million people need urgent humanitarian assistance in the Horn of Africa, with rates of acute malnutrition among young children in parts of Somalia estimated to be above 40 per cent.

Mr Zoellick said prices in the region had been soaring, with the cost of white maize jumping by up to 240 per cent in some areas. “Persistently high food prices and low stocks indicate that we’re still in the danger zone, with the most vulnerable people the least able to cope," he said.

The bank has committed $686 million in emergency assistance and development funding to the region.